An economist speaking last week at the Economic Development Authority’s annual State of the Economy luncheon said Northern Nevada’s economy has much to celebrate despite the recession — if it isn’t already here.
Low unemployment rates, rising incomes and huge sums of money churning into local economies are cause for optimism and concern. That’s according to economist Brian Gordon who delivered the keynote speech at the luncheon.
“We are now spending beyond our means. We are spending more than what is coming in the front door,” he said. “It has the potential to be problematic.
“Is the sky falling yet? I don’t think we’re quite there,” Gordon added. “But … obviously we’ve got some concerns in terms of what’s going on from a national perspective, right?”
Local economies are being influenced by national politics and federal interest rates.
“We’re generally seeing a decline in debt service levels for consumers across the board,” he explained. “And from a corporate perspective, we’ve seen more earnings than we’ve seen in our lifetime. It’s contributing to what we’re experiencing today, which is somewhat more of a stable environment.”
Gordon also said that the economy is in recession. There is a struggle to maintain the workforce, partly because there are more jobs available than employees. This is due to retirements and job changers seeking more upward mobility and better jobs.
Consumer spending and borrowing are also returning to normal since the pandemic.
“People are spending like drunken sailors,” Gordon added. But that cost is beyond their means, so the debt is increasing.
The luncheon was a celebration of EDAWN’s 40th anniversary. The group recruits businesses to locate in the Reno area — including Fernley — hiring locals and paying livable wages.
EDAWN’s Mike Kazmierski, in the wake of Tesla’s announcement to expand its Nevada operations to build electric semi trucks, said businesses are following through on their promises.
He cited Tesla as an example. Initial Gigafactory concerns about Tesla’s investment in Nevada have not been raised, he said. Tesla’s commitment to recruitment and contribution has been met and exceeded.
“We get a lot of tax revenue by reducing these taxes, letting them stay here and grow here. And Tesla is a great example,” he said. “Gigafactory will phase out their incentives in 2024. When that’s done. When you add in their employee incentives, they’re going through sales tax revenue and property tax revenue and other tax revenue going to the state. The state is adding $125 million to the economy. That’s money that wouldn’t have been here if we hadn’t lowered their taxes 10 years ago.”
Kazmierski encouraged the more than 1,000 people who attended the luncheon to ignore housing activists and NIMBYs.
He also pushed for the Truckee Meadows Public Lands Management Act — or land bill — and support for the Nevada CARES campus.
“Activists who think it’s better to camp anywhere, as opposed to being on a warm care campus where it’s safe — it’s a very unsafe, and very, very unhealthy environment,” he said. “When you look at those camps, I’ll ask any worker who’s spent just a few nights at the camp and tell me it’s better than being on the CARES campus.”